Frequently asked questions on Re-Mortgage
Why should somebody consider a re-mortgage?
- Now that is starting to change as people realise that many Irish mortgage holders are simply paying too much on their mortgage and are starting to consider moving to a cheaper lender. Maybe your lender hasn’t offered you a new rate after the end of a fixed rate or a variable rate is too high. Somebody on a variable rate could save thousands by simply moving to a cheaper lender.
- People should review their current mortgage terms and also review other offers by alternative lenders and a mortgage broker could assist with same.
- There is huge competition in the mortgage market with interest rates, and many lenders have cash back offers or are making contributions towards your legal fees.
- Historically home improvements were the main reason for people remortgaging in Ireland and the method, usually, was to call to your own lender and get a top up loan which was usually more expensive than an already expensive mortgage
If a person decides on a re-mortgage deal, what do they do next?
- They need to check that their current mortgage has no penalties for early re-payment. If it does, they will need to ensure the penalty will not exceed the savings made by the new loan. However, as interest rates have been reduced, you may still make a saving by paying the penalty and switching to a lower mortgage rate.
- Make contact with the new lender or a mortgage broker and start the application process.
- Instruct a Solicitor.
Why does a Solicitor need to be instructed?
- You will need to take legal advice in relation to the new mortgage offer which issues from the new lender. The Solicitor will review same with you in detail and advise of all conditions and implications of same. There will be conditions precedent that must be attended to prior to the funds issuing. They will witness your signature on the loan documents and return them to the lender.
- The new lender will be taking the property as security for the loan and they will require a Solicitor to certify the title. This means that the Solicitor must review all title deeds and planning matters and confirm to the Bank that there are no issues with the property.
- The Solicitor will request a redemption statement from your current lender.
- The Solicitor will send the requisition to the lender for your loan funds and they will issue to the Solicitors client account.
- The Solicitor will discharge your current mortgage and register the Deed of Release to remove that lenders charge from your property.
- The Solicitor will arrange for you to sign the charge documents and will register the new lender’s charge on the property.
- Once the charge is registered the Solicitor will return your title deeds to the new lender.
Should a person wait until their new loan offer issues before instructing a SolicitorThe reason for same is to prevent any delays with the transaction.
- No. We would suggest that as soon a person decides they are going to apply for a re-mortgage that they instruct a Solicitor at that point.
- The Solicitor will need to obtain the title deeds to the property in order to review the title and they will be held by the person’s current lender. The Solicitor will require the client to sign an Authority to permit the lender to release the title deeds to the Solicitor. It can take a few weeks for the lender to send the title deeds to the Solicitor.
- There are also documents that the Solicitor will need to obtain. From the client they will require receipts for the payment of the Local Property Tax, copies of planning permission and Architects Certificates for any works carried out the property by the client.
- If the client does not have these planning documents the Solicitor will request them from the Planning Department of the County Council and will arrange for the Certificates to be prepared by an Architect.
- At Dillon Solicitors we like to have this part of the work completed prior to the new loan issuing, so that the transaction can move quickly for the client.
Apart from applying for the loan and providing the Solicitor with the necessary documents is there anything else the person will need to do?
- Yes there will be conditions of the loan offer which they must comply with. For example obtaining a mortgage protection policy and assigning it to the new lender, obtaining home insurance and noting the new lender on the policy, submitting a direct debit mandate to the bank.
How long does the transaction take
- From the loan issuing, approximately 4 weeks.
If you require any assistance on this or any other property related matters please contact Lorna McArdle on 01 2960666